03.04.09 Supermarket fined after overcharging on fuel for 9 months

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A supermarket chain has been fined £18,000 after motorists visiting their service station were accidentally overcharged for fuel for 9 months.

The Tesco Ystrad Mynach in South Wales was found to have delivered 4% less fuel than customers paid for from 18 of the station's 36 fuel nozzles - around 9.2m litres of fuel amounting to £150,000.

Tesco admitted six offences of delivering short measures of fuel and using unjust measuring equipment between October 2007 and July 2008 under the Weights and Measures Act 1985.

The supermarket said the short measures were caused by an "incorrect modification" to chip and pin readers, but Caerphilly Council said no accuracy checks or tests were carried out on the affected pumps by engineers who had carried out the modification work.

A Tesco spokesman said: "As soon as the seriousness of the problem at Tesco Ystrad Mynach was discovered, we undertook a major operation to establish the full implications of the fault at the pumps and the customers likely to be affected.

"We have since contacted many thousands of customers to apologise for our mistake and offer a refund or, if they prefer, a donation to a local charity.

"Tesco will also make sure that the total refunds and charity donations add up to more than twice as much as the original overcharges caused by the fault at the pumps."

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How did this go unnoticed for 9 months?
Are we to believe that the stations' manager didn't notice that there was more money in the accounts than there should have been?
Still "EVERY LITTLE HELPS" and Tesco themselves nearly always raise the price of their fuel a couple of days before their 5p off promotion begins.
You can call me cynical if you want.

Posted by Michael Ashcroft., 3rd April 2009 7:49pm

hi,

I just bet there will still be some who maintain we are NOT being ripped off.

Tesco's have made such a huge profit from this 'unnoticed' scam that the fine is insulting to every motorist who had the misfortune to use their forecourt.

It is insulting to the motorists intelligence.

Imagine how many other garages could do the same thing and only be punished with a token fine.

The profits far outweigh the crime and the punishment.

If you think you are being 'short measured' phone the local councils weights and measures who should have their phone number posted on the pump or in the garage.

Posted by Steve M, 3rd April 2009 8:10pm

I wish there was Pubprices.com:

Then we could snipe at all the Publicans who:
Water down the beer (get 'ose in't barrel).
Dilute spirits.
Sell non-authorised spirits.
Pay below minimum wage.
Buy the cheapest $hite frozen food at Cash & Carrys then fry and micowave it before selling as "home-made".
Rip-off teetotallers with obscene charges for lime cordial and the like.
Sell $hite snacks at premium prices.
Can't be bothered to clean out the pipes and sell 'off' beer at inflated prices.
Serve undermeasures on everything.
Fill 'premium' wine bottles with any old vinegar from an out of date wine box.
Make HUGE margins on everything they sell using any made up excuse to increase prices.
Blame the smoking ban for having to put up prices.
Leave stale vomit in the bogs because they can't be bothered to clean up.
Etc. etc. etc.

Posted by Customer Of Steve M, 4th April 2009 12:40am

I am in no way a fan of Tesco - they have contributed to the ruin of many a town centre and ultimately remove choice for consumers - but shouldn't we recognise the word 'accidentally' before getting too hysterical?

In this day and age of spin and PR it's pretty obvious that an organisation like Tesco would much prefer something like this NOT to have happened. The cost - in terms of reputation damage - far outweighs even the fact that they are reimbursing twice the amount that they 'benefitted' by.

Talk about "insulting to the motorists intelligence" is nonsense.

Posted by Bob Searle, 4th April 2009 9:27am

#4
"but shouldn't we recognise the word 'accidentally' before getting too hysterical"?
1st of all; a week to 10 days might be seen as accidental but 9 months?
Strange also that exactly half the pumps were set up this way and, as most people rarely use the same pump on each occasion you could fill up one week and maybe suspect something but when you fill up the following week at a different pump everything will seem fine and you'll put your suspicion
down to pessimistic assumptions.
As for Tesco offering to refund customers or pay twice the loss to local charities consider this:
over a 9 month period how many people pay by cash and therefore Tesco have no way of knowing (unless clubcard points were issued) who to reimburse, and as I intimated in comment #1 why wasn't it detected and reported sooner by the manager(s), why did it take 9 months? and as most big companies have to audit accounts internally weekly or at least monthly couldn't they see that more money was coming in, in relation to what was being sold?
As for post #3, this blog relates to fuel prices yet there's always a minority who would like to take a swipe at in this case the publicans,
what's the matter, wouldn't Steve M extend your slate?

Posted by Michael Ashcroft., 4th April 2009 10:12am

"An Accident" I don't think so

I will try and keep this simple

Under the Petroleum (Regulations) Acts 1928 and 1936 a Licensed Premises (Petrol Station) has to keep adequate records of the petroleum-spirit monitoring and reconcilliation system etc. etc..
This basically translates into keeping wet stock (Petrol) records to show whether there are any losses or gains in wet stock. This has to be compiled daily and equates to :-

"Opening stock minus sales plus delivery minus closing stock = variance"

If the variance is greater than + or - 0.5% over a period of several days then the local Trading Standards should be informed and the reason for the variance ascertained.
Most Petrol Stations will run at approx -0.3% (a loss) due to temperature of delivered product and volatility of Petrol (evaporation).
Short dispensing by 4% on half the hoses would show a variance of plus 2% overall and alarm bells should have started ringing after the first day.

To let the situation run for 9 months is paramount to theft.

Maybe that is why Supermarkets can charge 2-3p less per litre than a "proper" petrol station !!!!!!!!

My site may not be the cheapest but is regulated meticulously by myself and the Petrol pump meters are sealed and stamped by Trading Standards regularly

Yet again the Supermarkets are exposed

Posted by Steve The Poor Garage Owner, 4th April 2009 10:59am

And Finally

"incorrect modification" to chip and pin readers" (their excuse)

Chip and Pin readers are what you put your credit card into at the till and have nothing at all to do with fuel metering at the petrol pump

Posted by Steve The Poor Garage Owner, 4th April 2009 11:15am

# 6 & 7.
Absolutely spot on from one best qualified to comment.
I personally never buy fuel from any supermarket forecourt since reading postings by Adrian Bell with regards to better mpg from independents such as yourself and I too find fuel consumption better this way and no doubt he realised this before many of us ever thought about it.
I prefer to pay a penny or two more for good fuel than 5 p less for..........................well less in this case.

Posted by Michael Ashcroft., 4th April 2009 12:17pm

This comment has been removed as it was found to be in breach of our Blog Policies.

re 3 (not) customer of Steve M.

heh heh, nice one, ha ha. I will entertain you this once.

Perhaps you are using the back street pubs in your local roughest area where you live. (although they are becoming few and far in-between)

"Water down the beer (get 'ose in't barrel)."
//tell me, how do I open a barrel and still maintain the high pressure?. "....(get 'ose in't barrel). you really have no idea, heh heh.

"Dilute spirits."
//even a poor connoisseur of fine spirits can tell if there is water added.

"Sell non-authorised spirits"
//I am not tied to any body that regulates the purchasing point of spirits.

"Pay below minimum wage."
//Sorry, no to that one. It is illegal.

"Buy the cheapest $hite frozen food at Cash & Carrys then fry and micowave it before selling as "home-made"."
Again illegal. I actually pride myself on real "homemade food" that is why I employ two top chefs. (we occasionally use a 'microwave' in our kitchen)

"Rip-off teetotallers with obscene charges for lime cordial and the like."
//I go to the cash and carry to buy the cordial, I employ someone to pour the cordial into a clean glass and add soda or tap water. The customer then uses a chair and the heat from the radiators. They have free unlimited use of toilet facilities (usually peeing on the seats and telling no one) and free unlimited use of sports on TV or free use of karaoke or a group on stage. Then they usually only buy 1 drink for the night and still expect to have as much use as someone who spends pounds and pounds. When they leave the pub someone is payed to clean their mess (usually crisps from a local shop) crushed on the table, chairs and floor. Their glass is then placed in a glass washer to cleanse and sterilize it for the next person to use. So I would say the £1.50 for a pint of cordial is a cheap drink.

"Sell $hite snacks at premium prices."
//The $hite snacks are exactly the same as any other retail outlet. Around the same price as any garage.

"Can't be bothered to clean out the pipes and sell 'off' beer at inflated prices."
//Any person who drinks beer or lager can instantly tell if a pipe is unclean. A look at the contents of the glass (cloudy or clear) is a dead give away. It is in the publicans best interest to serve the highest quality pint. The barrels are date stamped and an inspection is welcome at any time.

"Serve undermeasures on everything."
In every pub without pre-set half pint measures which are in turn sold in over sized glasses, there should be a sign clearly stating "we are happy to 'top up' any pint to a level of the customers liking" In the Midlands the customers like a large 'head' on the pint whereas in the North East they prefer the glass filed to the top, any publican will train the staff to pour the pint to the customers liking. Spirits are sold in predefined optics supplied by the brewery and all are inspected by trading standards on a regular basis.

"Fill 'premium' wine bottles with any old vinegar from an out of date wine box."
//Again not in the publicans interest. Why would I do that anyway? Any real wine drinkers really know their stuff.

"Make HUGE margins on everything they sell using any made up excuse to increase prices."
//(I think you meant HUGE 'profits') The profit margins are very slim, only the mass producers like Harvesters can buy in such bulk and undercut all around.

"Blame the smoking ban for having to put up prices."
//What are you rambling about??? The prices 'go up' when the breweries increase the barrel price.

"Leave stale vomit in the bogs because they can't be bothered to clean up."
//Perhaps you would like to tell the bar-staff the next time you throw up in the 'bogs'. Perhaps we could provide a little doggy bag and you could take it home with you next time.

Either way, the publicans lot is becoming a small lot. Pubs are closing everywhere and fast.

The author of the witty blog no;3 will shortly have something else to moan about, pubs as we know them will soon be a thing of the past.

Posted by Steve M, 4th April 2009 6:57pm

re 6 & 7 Steve,

Question.
As the underground storage tanks are being emptied by paying customers there is obviously a way of knowing exactly how much is still sloshing around.
Do you order the next tanker-full depending on how much is left?

If so, what if there were a leak in one of the underground tanks. Would that also show up. Would the supermarket wait 9 months to report a shortfall?

Not on your nelly.

re 8, Michael,
You are quite correct. Adrian was telling us some time ago to buy from reputable garages even if it cost a penny or two more per litre as you would inevitably get far superior MPG.

Adrian, if you are looking in, I hope you are well.



Posted by Steve M, 4th April 2009 7:12pm

#9
Answer.
Most petrol staions (still left in business after the supermarkets have hoodwinked people into buying "cheap" fuel" will have electronic Tank Gauges which gives a reading of product in the tank either when requested or when performing a "day end". At the day end either a "Back office" computer will work out the "Variance" or the station manager will get his calculator out. This has to legally be performed at least once a day.
With just a 0.1% loss on product relating to £5000 a year it is worth every petrol station keeping an eye on stock loss. Also a split tank or pipe could result in ground contamination costing hundreds on thousands to clear up.
Most tanks nowadays are double lined with an interstitual leak detection alarm fitted to alert the station manager immediately if there is a leak from the tank.
Most tank gauges are also fitted with self testing software that will alarm if product sold via pumps does not equal ullage (space) left in tank.

So for someone not to notice a significant loss or gain is at the very best grossly incompetent and should not be given responsibility. For an organisation such as Tesco not to have basic housekeeping measures in place defies belief but, their just after the money.

The above mentioned equipment is not cheap. A total re-fit including Tanks, Pumps, gauges and fuel lines on a existing site will cost around £400,000.00 (and no - the petrol company does not supply these)

Petrol is ordered in advance, when required based on Tank dips and expected sales.

I think I have gone on enough. Hopefully a little insight into a modern day petrol station. It's worth the extra couple of pence to know that you are getting what you are paying for and keeping local people employed.

Thanks for your interest

Posted by Steve The Poor Garage Owner, 4th April 2009 8:34pm

re 11 Steve,

Thanks for the information.

Do you think yourself would have been treated so lightly if you were that incompetent (or plain stupid)? I think you would still be behind bars for a little while yet.

Based upon your knowledge, the Tesco garage manager (or whoever is in charge of recording the data) is either grossly in breach of (government?) guide lines or a pretty good imitation of a thief.

Either way, as I said before, the punishment hardly fits the crime.

Is the site manager still working? Is he still a manager? Will he face criminal charges?

Supermarkets. They really have a lot to answer for. They have killed the community spirit by forcing corner shop closures. They undercut everybody selling everything. Even the butcher is being replaced by meat on Styrofoam dishes covered in plastic.

I sound like blog No;3 now, moan moan moan.

Posted by Steve M, 4th April 2009 10:31pm

Good Morning Steve M

Based on my belief, which may just be to appease business owners trying to compete against supermarkets:-

there is no dedicated Supermarket petrol station manager (in deed rather than title), the responsibility lies on the general store manager.

Petrol and diesel sale profits are insignificant for a supermarket. Fuel sales are just a means to an end. An average super/hyper market will sell £27000 of fuel a day, with no net profit (possibly not even gross profit) being made as it attracts customers to the shop (with its big advertising "cheap fuel" sign(maybe in value as wall as cost)). The shop will take £200,000.00 a day at an average profit of 8%.

This gross profit of £16000.00 for the store, as a whole, per day, pays for all the overheads (including the petrol station), staff, credit card costs, electricity , business rates, etc etc

The Supermarkets petrol station with its big price sign is just a big advert saying

"Look how cheap we are"

Advertise cheap fuel to your customers to attract them into your shop and they will think that your shop goods are cheap also. They will be cheap on the top 100 KVI's (Known Value Items) such as milk, Tea bags and Mars bars but look for a lesser bought product such as Jacobs Creek wines (a top selling wine in the UK) and they will be more expensive than your local Convenience store/ Petrol station.

So in answer to your question, Steve M:-

No, I do not think I would have been dealt with so favourably, because I have my name behind my business, my house behind my business my name and house behind my reputation and my reputation within my community.

Shop local and look after your locality

Posted by Stev The Poor Garage Owner, 5th April 2009 12:55am

Hi everybody, yes I'm back and I won't bore you with my recent test results other than to say that quadruple bypass is being lined up so I'll probably be
unable to drive for some considerable time if ever, hooray to that.
I've just read the latest blog with great interest as I know the fuel station in question quite well and even when I was driving I wouldn't buy fuel there.
Steve M if I say there's 4 cans of lager for 90p and there's Stella Artois you'll know what I mean.There's no substitute for quality and I'm sure your customers know that you keep a good house.
Steve T.P.G.O. tank dips at the end of the day, that takes me back and when the tanker drivers used to dispense the fuel into the underground tanks and then dip their wooden swords into the tanker and then remove it dry whilst swiftly taking off the condom from the end of said swords making you believe
that their tank was indeed empty (not a practice done today you understand)
and in my day a surcharge was imposed if we couldn't receive (didn't have enough room) the fuel we'd ordered.
Back to Tesco I can only echo the thoughts of Michael Ashcroft, Steve M, Steve T.P.G.O, why a full 9 months had elapsed before this came to light.
There are more questions than they'll ever give us answers to and Steve T.P.G.O. put a slogan in your window:-
WHEN YOU COME TO OUR PUMP METERS,
THEY ALWAYS DISPENSE FULL LITRES.
AND IF YOU WANT LESS GO
TO YOUR LOCAL SUPERMARKET (Couldn't think of a rhyme there).

Posted by Adrian John Bell, 5th April 2009 1:13am

This comment has been removed as it was found to be in breach of our Blog Policies.

This comment has been removed as it was found to be in breach of our Blog Policies.

The manager at Tesco's needed a break
So the motorists money he decided to take
"You robber, you thief" cried the hordes
So they gave him a job in the house of lords
"I feel like a fake" said he "I've taken in greed"
As the next prime minister, you have what we need.
So next time you're standing at the bar
Or in the garage filling your car
Remember the taxes all around
They even chase you into the ground.
Politicians convince you every day
to lie is dishonest and crime does not pay.
If you believe them, we'll all say "tut tut"
And surrender your life with your eyes wide SHUT.

It's the best I could do in the short time.

Adrian. Hello my friend. Good to have you back.

Posted by Steve M, 5th April 2009 11:54pm

re 13 Steve, good evening.

As the supermarkets were selling $hit quality fuel for less to impress the casual shopper in the run up to Christmas, why can they still sell the same $hit fuel but now for more than an independant garage as is the case in most areas near where I live?

Cheapest diesel is 97.9ppl at Shell garages (B'ham area) Ironically this has gone DOWN a penny since last week.

Posted by Steve M, 5th April 2009 11:58pm

Thursday 31 January 2008 09.50 GMT Article history
Shell petrol pump.

Good Morning Steve M

Most Shell sites are not actually "independant" they are owned by Shell. Below is perhaps the reason they can sell under cost

"Guardian 31/01/09"
"Shell was today accused of making "obscene" profits at a time when pensioners, motorists and industry are struggling with higher energy prices when it unveiled annual earnings of $27.6bn (£13.9bn)".

Oooooh Bad Guys!!!

"Cheapest diesel is 97.9ppl at Shell garages (B'ham area)"

Oooooh Good guys !!!!!!

The playing field is not always an even one

Posted by Steve The Poor Garage Owner, 6th April 2009 9:29am

This comment has been removed as it was found to be in breach of our Blog Policies.

my local esso is now 99.9 unleaded and 101.09 for diseil yet he barrles of oil are about 52 dollars a barrel at is peak it was 147 or soemthing and unleaded was 116.09 now look at these prices 2 per cent or not this is well profiting and something needs done

Posted by Dazz22, 6th April 2009 10:34pm

Could somebody please tell me why the price of oil having dropped by66%, the price of petrol/diesel has only dropped by 25% at our major suppliers? A local, independent station close to me (8 miles) is selling diesel at 5p less than Tesco? Of course I go there, but what is the answer to my first question/ Why does the govt. allow it?

Posted by Bob Hedley, 7th April 2009 8:49am

RE # 19

Bob do you not read the blogs? Do you have no understanding of world economics? Do you not realise that the government is robbing us?

71% of the price of a litre is Duty and VAT

ie. for every £10.00 you put in your tank £7.10 goes to the government

This Duty is fixed and is not dependent on the price of a barrel nor is it dependent on the $ exchange rate.

So lets look at what can vary in the price of a litre if priced at 94.9pence

Duty 54.19p non variable
VAT 12.37p non Variable
cost of crude @ $54 (Fri) 22.94p Partly Variable
refining & distribution 3.29p non Variable
Petrol Station margin 2.11p not enough to cover overheads

so theoretically even if crude oil was free the price of a litre would only go down by 26.38 pence (22.94 cost + 3.44 VAT) as the duty, VAT, refining costs, distribution costs and station margin would still have to be paid.

At the height of the fuel crisis you could get $2.1 for every £1. now you can only get $1.48 for every £1. so by the time you import crude into the UK the crude cost has increased by 30%

There are many factors influencing the price of a litre of fuel but the main contributor is the 71% we pay to the government

You may as well argue that Beer is 99% water and water is free so why is beer not free

Posted by Steve The Poor Garage Owner, 7th April 2009 10:22am

Tesco are the same price as most of the garages where I live in Kent the only thing extra you get is there pathetic points which are worth nothing as you have to spend them at there stores

Posted by Nicky, 7th April 2009 3:52pm

Why has everybody suddenly stopped adding comments? could it be because
ALL internet activity is now logged and retained by H.M Government.
(Big Brother). Freedom of speech, where's it gone?

Posted by Robert Newman., 9th April 2009 11:33am

hi,

'Petrol.coms' attempt at a backlash against the government is hardly pushing the boundaries of protests to new unprecedented levels.

It just proves what a whingeing, whining, moaning nation we have turned into.

Everyone is jumping on the bandwagon to complain about the extra cost of fuel but when the country calls for action they bury their heads in the sand.

This government know what a spineless lot the Brits really are.

130ish comments in two days condemning impending further increases says it all.

I can't wait until St Georges day when thousands will be back having the usual moan about taxes and duty.

Posted by Steve M , 10th April 2009 7:47pm

"the only thing extra you get is there pathetic points which are worth nothing as you have to spend them at there stores"

Really? I got into Alton Towers free last year with clubcard points. :)

Have stopped going to Tesco since though simply because they are so expensive. A trolley of shopping in Tesco that costs us £100 would cost us £70 in Morrisons.

As for the better quality fuel, I bought Shell fuel for about a year and noticed no mpg difference to supermarket fuel. Much as I would like to support an independent garage, it would cost me around £2.50 extra per fill up, so I don't. Sorry.

Posted by Jdh, 21st April 2009 8:17am

Sorry to come to this a bit late. I cannot believe that this store manager didn't notice that he was making a much better margin than usual, or his bosses didn't, so makes me wonder if all the £20 notes chucked on the counter with a cheery" Pump number 6, mate" got mislaid somewhere. I always used to use my local (more expensive) Total garage until last September, when I was reading empty. Put in £10 cash, drove off, fuel gauge still reading empty, went back and advised cashier. " If it says £10 you must have had £10 worth" Topped up later with £48 ie full tank at different pump and advised same cashier. She was adamant pump was Ok. That was Friday 9am. Pump was sealed on Monday- AND IS STILL SEALED TODAY- 8 months later (and this is a garage with 12 pumps total) Never got my money back so have never bought there since.
At least they gave it to charity - hope it was local to the area.

Posted by David C, 23rd April 2009 12:07pm

It's not just the price of petrol or the accuracy of the pump delivery system that we have to worry about, but also the quality!
late in '07 I was on my way to Belgium via Hull and filled my petrol tank at my nearest filling station - a Morrisons. Then I drove to another Morrisons filling station to fill up with LPG (not available closer to home) even though my car still wasn't running correctly on gas (since fixed).
Les than 10 miles 'up' the motorway the car began to lose headway and eventually stalled out on the hard shoulder. As I would have lost the price of the prepaid ferry fee if I didn't get there in time to board it I soldiered on, alternately switching from gas to petrol and back again.
For many miles I was struggling to exceed 25mph and was in danger of arriving late; not to mention the possibility of a truck running in to the back of my car. Eventually I was able to stay on petrol and my maximum speed slowly rose - 30, 35, 40, 50, 70 ... er 70 ;)
Fortunately there was a problem at check-in and, although I was technically late, I was permitted to board the ferry.
So, what was the cause of the problem? I couldn't say for certain, but I'm convinced that it was water in the fuel as the area had been flooded in the heavy rains of that Autumn and, although the underground tanks had been allegedly cleaned and flushed out, I think it's more than likely that they hadn't done the job properly.

Posted by Jan Forrest, 4th May 2009 10:40pm

I think I'll be having a printout from this ... given that I recently had a set-to with a Tesco Petrol till-monkey over how much fuel I was being charged for - a shade under 60 litres (like 59.94) in an old Renault Megane. Highly unlikely. I've never put so much in before or since.....

Granted, I was a bit low, and the manual says "60L capacity" - but even when I completely ran dry, and got to the station with the aid of a 5L (well, 6-ish) can, it only took low fifties to brim it!

Their argument... our pumps are absolutely accurate and they're checked by trading standards etc... I didn't swallow it (if pumps always WERE accurate, there'd be no NEED to have them checked - and how long was it since the inspectors were last round?), but not having too much of a leg to stand on as the fill amount was still below the manufacturer's (bone dry to completely brim-full) figure, and the likely cost difference (e.g. 4% of a £50 bill) wasn't going to be worth the time it took to argue with him just once, I had to leave it.

Perhaps something like this as backup might make them a little more amenable to a double check with a crown certified measuring device in future?

Or perhaps I'll just go to one of the other local stations which your site has just shown me are actually a penny a litre cheaper anyhow :-D If they're going to abuse customer loyalty that way, then we may as well just go buy better quality stuff at a lower price elsewhere and turn their entire supposed business model (which they claim is exactly that idea) back on them.

Posted by Tahrey, 6th May 2009 12:24pm

Can any one tell me why prices at the pump (diesel) change from garage to garage. I fill up at Morrisons in Cheshire where the Diesel is 101.9 I also fill up at Morrisons in Blackpool where it is 99.9 same chain, different prices... cheeky

Posted by Vincent, 8th May 2009 3:33pm

Am i missing the point or did we all sign up to petrolprices.com because we were promised a fuel discount card a very long time ago? The premise was simple, brand loyalty for a discounted price. What ever happened to that idea i wonder? I also wonder how much Fubra Ltd (petrolprices) has made from selling off our contact details?

Posted by Stuart Mcgall, 15th July 2009 7:23pm

it was interesting to read comments regarding tesco's fuel history in wales.
I live in the east midlands and watch the fuel prices in a 20 mile radius of where i live, there are several big tesco stores in our area ( nottingham/derby) and theynever feature in the list of cheapest fuel prices, even when they offer 5p a litre off they don't come up cheapest. Asda and Sainsbury are always 2p or 3p cheaper

Posted by Brian Perrett, 26th October 2009 9:02pm
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